Which of the Following Is True Regarding an SEP

question 1

Multiple Choice

Which of the following is true regarding an SEP?

• A)Cannot discriminate in favor of highly compensated employees.
• B)Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $54,000.
• C)Self-employed individuals cannot create and contribute to an SEP.
• D)The plan must cover all employees who have reached the age of 18,who have worked for the employer for at least two of the preceding five years,and who received at least $600 in compensation.

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Definitions:

Average Fixed Costs

The fixed costs of production (costs that do not vary with the level of output) divided by the quantity of output produced.

Output

Output is the total amount of goods or services produced by a person, machine, business, or country.

Average Costs

Average costs refer to the total cost of production divided by the number of units produced, indicating the cost of producing each unit.

Marginal Costs

The cost added by producing one additional unit of a product or service.